The Relationship between Each of (Return on Equity & Return on Asset) and Annual Return in the Abu Dhabi Securities Exchange (ADX): Evidence from United Arab Emirates

Abstract

This study aims to discover the relationship between each of Return on Equity & Return on Asset and Annual Return in the Abu Dhabi Securities Exchange (ADX). The researcher takes approximately 50% as a random sample of the companies listed in ADX, for many sectors to achieve this goal.After the researcher collect the data needed to achieve this study, he calculate some of ratios as variables of study, like the annual Return for the companies (R_it), Return on Asset (ROA), Return on Equity (ROE) he used Statistical Package for the Social Science (SPSS) to analyze the data collected.The result of this study were the existence significant relationship between the (ROA, ROE) and the Annual Return (Rit) in the companies listed in the Abu Dhabi Securities Exchange (ADX), and the ROA and ROE together as Independent Variables explain (22%) of the changes that happened in the Dependent variable (Rit).And significant relationship between the Return on Assets (ROA) only and the Annual Return (Rit) in the companies listed in the Abu Dhabi Securities Exchange (ADX), and the ROA alone as Independent Variable explain (13.6%) of the changes that happened in the Dependent variable (Rit). And significant relationship between the Return on Equity (ROE) only and the Annual Return (Rit) in the companies listed in the Abu Dhabi Securities Exchange (ADX), and the ROE alone as Independent Variable explain (20.4%) of the changes that happened in the Dependent variable (Rit).

JEL classification: G20, G21, G24, G30, G31

Keywords: Abu Dhabi securities Exchange (ADX), Return on Assets (ROA), Return on Equity (ROE), Annual Return (R_it).